How Surgical Care Affiliates will approach thoughtful growth, value-based care in the future: Q&A with CEO Tony Kilgore

Tony Kilgore, CEO of Surgical Care Affiliates, discusses the biggest challenges and best opportunities for the company going forward.

Mr. Kilgore is participating on the keynote panel at the Becker's ASC 25th Annual Meeting in Chicago, Oct. 19, 2018 at 8 a.m.

Question: What are the top challenges facing ASCs today? What factors in the market place are driving those trends?

Tony Kilgore: For the past several years, we have seen a marked shift from physicians in independent practice to hospital employment. The number of independent physicians dropped from 57 percent in 2000 to just 33 percent in 2016. Specialists (surgeons) have been somewhat immune from this shift -- approximately 60 percent of physicians across subspecialties are still independent and are trying very hard to maintain their independence in a challenging environment.

We know that many physicians choose hospital employment due to pressure on their reimbursement, declining referral base and general practice cost and complexity. Successful models for independent physicians include joining large, branded groups and alignment with health systems, health plans and medical groups to build mutually beneficial partnerships that support the interests of patients, providers, health systems and health plans.

Establishing relationships with physicians early in their careers — whether they are in residency or just starting their practice — is another key success factor. Helping the next generation of physicians understand their options and sharing which models have been effective will be critical to the future success of ambulatory surgery centers (ASCs).

Another trend we are seeing is the shift to value-based care. This is more of an opportunity vs. challenge, although many ASCs are not ready to take on value-based reimbursement on their own. ASCs and other high value sites of care play a critical role in preparing and supporting markets in a value-based environment. Currently more than half of SCA facilities are in value-based arrangements and we expect that number to grow, quickly. Having the right value levers and paths to risk arrangements are crucial attributes for ASCs.

Q: Where do you see the best opportunity for ASCs to take advantage of value-based care and build a sustainable foundation for future success?

TK: ASCs by nature are built to deliver high-quality, lower-cost surgical care. Inherently, they are optimally positioned to be a part of value-based reimbursement. The challenge they have is ensuring the appropriate patients, right alignment with the risk-ed based entity, and appropriate contracting to monetize or benefit from the value they are creating.

Based on our experience at SCA, savings programs have been extremely well received because they align the interest of the payer and provider, ultimately delivering better care at a lower cost. It's a win-win and we've gotten very good at building these arrangements over the years.

Q: How do you see SCA growing over the next few years and what are you most excited about as CEO of the company?

TK: When SCA joined OptumCare in 2017, we were instantly connected to one of the largest physician networks in the country, many of which currently practice value-based care or are on their way.

As CEO, the potential for SCA's growth as part of OptumCare is very exciting. We expect to expand the number of SCA facilities significantly in the next five years. By aligning with OptumCare medical groups (39,000 physicians and growing), we have a compelling opportunity to meaningfully improve surgical care for millions of people.

At the same time, we must be thoughtful about our growth. We choose the right partners that we know of the potential to be successful with us, and in the right markets. As we unlock markets, we will invigorate independent physicians and we'll have even more tools for growth and relevance on a national basis. Our multi-payer approach is strong, and we can meaningfully engage in the value discussion.

Growth is exciting, especially when we know it directly translates to fewer infections, more convenient and comfortable care, and substantially lower cost. I’m proud to be part of the movement to improve health care in America, one patient at a time.

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